In March of this year, I wrote a Newsmax column warning readers about a frightening trend of homeowner fraud emerging in the rooftop solar leasing industry. Late last week, the Energy Daily published a journalistic gem about SolarCity that confirmed not just the consumer fraud concern but raised other pitfalls associated with the rooftop solar leasing business model.

On August 8, Energy Daily reporter Eric Lindeman eloquently described how the “Wall Street darling” SolarCity “took a beating on Wall Street” after the company reported quarterly losses of $40 million in the first quarter and almost $50 million in the second, and projected even further losses for the rest of the year.

“The company expects to lose more than $1 billion from this year through 2016,” Lindeman reported. Some analysts have taken a bewildering positive spin on SolarCity’s “earnings” report, emphasizing that SolarCity’s tens of millions of dollars in net loss was not as bad as they had expected it to be. That kind of anomalous praise is the financial equivalent of congratulating a friend who lost his legs because he might also have lost a hand. Not exactly investment-inspiring.

Almost as baffling, SolarCity announced in June that, notwithstanding its massive and continuing net loss, the company is going to borrow another $750 million to buy a solar panel manufacturing company and build a manufacturing plant. Given the fact that SolarCity has been relying on a supply of heavily subsidized Chinese solar panels that will now be subject to significant U.S. import duties, this move might have made sense . . . were SolarCity in a better financial position. But it is not.

SolarCity is not profitable today and it is amassing huge amounts of debt — debt that is backed by bundled solar panel securities in a financing arrangement that uncomfortably resembles the mortgage-bundling scheme from a few years back that continues to haunt the U.S. economy.

Energy Daily quotes one financial analyst as follows: “As clearly shown in the numbers, SolarCity is growing, but it is growing at the cost of even greater losses. No business can sustain itself in the long run in a model that burns more cash than it generates.”

As I see it, though, the core problem with SolarCity’s business model is not just its poor cash management, but the fact that its continued existence depends on unscrupulous dealings. I cannot say it better than did the Casual Analyst, as quoted in the Energy Daily.

“[SolarCity’s] lease model depends largely on uninformed customers buying the unattractive lease/PPA products. The supply of this class of customers is likely to be plentiful as the company targets new geographies, but we expect the supply of gullible customers to decline as solar penetration increases.” In other words, SolarCity preys on fools — but fools will be harder to come by once word of this scandal gets out.

And don’t forget the federal investigation into Solar City by the U.S. Treasury Department. At issue there are possible misrepresentations about the “fair market value” of the company’s solar systems. Put simply, the U.S. government suspects that SolarCity overvalues its solar property in order to wring more cash subsidies out of the American Recovery and Reinvestment Act than it otherwise could. If you give a mouse a cookie. . . .

As Thomas Jefferson famously said, “resort is had to ridicule only when reason is against us.” And the increasing mass of evidence shows that truth and reason are not SolarCity’s friends.

Bradley A. Blakeman served as deputy assistant to President George W. Bush from 2001-04. He is currently a professor of politics and public policy at Georgetown University and a frequent contributor to Fox News Opinion. Read more reports from Bradley Blakeman — Click Here Now.